by Jennifer Lonoff Schiff

7 ways small businesses can leverage customer data

Mar 24, 2016
AnalyticsBig DataCRM Systems

Marketing, customer experience and data experts discuss what small and midsized businesses can learn about customers from the data they collect.

customer care ts
Credit: Thinkstock

While big companies have been using big data to identify trends and track customer behavior for a while now, smaller businesses, with smaller budgets and fewer resources, are often unable to. However, by simply analyzing the data they’ve collected from email lists, customer purchases, social media and other sources, SMBs can gain a variety of insights into their customers – and use this knowledge to improve processes and discover new business opportunities.

[Related: 8 ways to make the most out of your customer data ]

Here are seven simple ways SMBs can use customer data to benefit both their customers and the business.

1. Making email marketing more effective.“Incorporating customer data can significantly improve email marketing efforts,” says Sarah Matista, marketing communications manager, Vistaprint Digital. “At the most basic level, simply including the recipient’s first name in the email can boost engagement.”

“Incorporating more complex data like site browsing history can allow businesses to send automated follow-up emails, reminding users of products they’ve browsed, or offering similar products or relevant deals,” she says. “The more information in the email, the more it can be tailored to the interests of each consumer, and the more likely it is to be opened, read and potentially acted on.”

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“Customer data shapes our email marketing strategy,” says Steve Levine, a digital marketer at JAM Paper & Envelope. “We use it primarily to create specific shopper segments. [Then] we [can] tailor our products, email graphics and subject lines based on these segments. For example, for teachers we will feature binders and folders as products, desks and chalkboards as background graphics and a cute subject line that they can relate to,” he adds. “These customizations have increased our top-line conversion rate by 15 percent. Prior to these segments, we were really just throwing emails at the wall and hoping they led to sales. Now that we have hard data on who shops with us, we can personalize the shopping experience.”

2. Creating personalized offers. “Customers of the mobile age respond well to hyper-targeting and having experiences specifically tailored to them,” says Momchil Kyurkchiev, cofounder and CEO, Leanplum, a mobile marketing automation platform. “User data facilitates this, making it easier for businesses to understand their customers and develop better interactions with them. Small businesses using customer data to personalize experiences are better positioned to strengthen their customer bases and build brand loyalty.”

[ Related: 9 ways mobile and social tech improves the retail shopping experience ]

“SMBs should use information like birthdays, membership anniversaries or [a customer’s] last visit to target customers with relevant communications,” says Cassandra Schwartz, senior manager, product marketing, Front Desk, a provider of mobile client management and scheduling software. “For small businesses like yoga studios or gyms, this information is gathered upon registration. However, other small businesses shouldn’t be afraid to ask customers for these details – like when [someone] orders a pizza, or purchases a gift card. If they haven’t been in in 30 days, use this opportunity to send an email to re-engage.”

“By tracking what product a customer buys, and when they buy it, SMBs can send promotional offers to bring the customer back in for a replacement when they are most likely to repurchase,” adds Mark Harrington, vice president of marketing at Clutch, a consumer management platform. “Timely offers not only deliver relevancy, they can also be viewed as a valuable service to the customer, which can translate into stronger affinity and loyalty to your brand.”

3. Identifying lapses in operations.  “By spotting patterns in when customers complain and what they complain about, business owners [can] identify specific locations, processes or even employees that don’t maintain the company standard,” says Troy Ruemping, senior associate, Point B, a management consulting firm. “The challenge is to blend data that is sufficiently aggregated to identify reliable patterns (rather than outliers) with data that is sufficiently localized to identify the culprits.”

“[Customer data] can help you discover and solve problems that otherwise may be hard to find,” says Jill Soley, vice president, marketing, Freshdesk, a provider of online customer support and help desk software. “For example, one customer of ours that ships wine domestically discovered through their help desk reports that there had been a disproportionate number of errors, where the wrong bottles had been shipped to several customers,” she says. “By providing additional training to their quality control team, they were able to [reduce errors] and make their customers happier.”

4. Improving customer support. “Understanding your customers and using the data you have about them is critical to customer support,” says Robert C. Johnson, CEO, TeamSupport, a provider of B2B customer support and help desk software. “Smart companies share customer-related data with their support teams so that a support agent can understand the whole relationship with the customer and see at an instant what products they have, what recent issues they have experienced and also notes or comments from the sales team about the account.”

[ Related: 5 ways ecommerce business can improve customer service ]

5. Developing new features and products. “Mining data from support interactions can [also] be a goldmine for developing future versions of your product,” says Johnson. “The customer support team is on the front lines and communicates with your customer base every day. No other group in a company is as close to the users of your product as your customer support team, and the interactions they have on a daily basis with your customers are invaluable for understanding how your product is used and what features may be missing.”

“At the end of each call or email from our support team, we ask [customers] if there’s a feature they’d like to see in our product,” says Eric M. Ebert, marketing and communications manager, Lookeen, a provider of desktop search software. “These are added to a whiteboard in the support office, so everyone can see what the issues are. If a feature gets 10 votes, we add it to our ‘roadmap’ Trello board to discuss at our monthly development meeting.

“This works great, because 1) If we build the feature, we can reach back out to those customers and tell them that we added it, and 2) It starts to create a social buzz around the feature, because we solved a problem and showed our customers that we actually listen to their opinions,” he says. “Essentially our customers are helping us deliver a product that they really want.”

6. Choosing a new location. “Small businesses can also apply [customer] insights when making strategic business decisions, such as selecting a location for their new storefront,” says Duncan McCall, CEO, PlaceIQ, which offers a platform that aggregates specific audiences based on location, time and behavior. “By using location and consumer data to inform them of an individual’s physical customer journey, businesses can strategically choose a location that is opportune for consumers to get what they want, when they want it.”

7. Winning back customers. “With the right program in place, SMBs can detect a decline in visit frequency among customers,” says Kristen House, mobile product manager, Paytronix Systems, a provider of customer reward programs. “They can [then] use that intelligence to win customers back. The brand simply identifies the customers who have not visited for a specific period of time – let’s say 90 days. A message is [then] sent reminding the customer of why they love the brand and includes a special offer to return.

[ Related: 12 easy ways to lose your ecommerce customers ]

“Win-back promotions typically have a positive ROI,” she continues. “In fact, Paytronix has seen as much as a 10x return in some cases. Even better, a larger portion of the target audience returns to their previous visit rate.”